Strong Performance in 2017 for Sportscene Group and the La Cage - Brasserie Sportive Network

MONTREAL, Nov. 23, 2017 /CNW Telbec/ - Management of SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) is pleased to disclose the financial results for the fiscal year ended August 27, 2017. This year gave rise to accelerated sales growth for the La Cage – Brasserie sportive network and to a significant improvement in Sportscene's profitability, cash flows and financial position, reflecting the direct impact of the strategic repositioning carried out over the past years. 

Financial Results for the Fiscal Year and Quarter Ended August 27, 2017

During the last fiscal year, total sales ⁽¹⁾ of the La Cage – Brasserie sportive network increased by 12.9% to $120.5 million. Besides the opening of a new Cage, the network posted a substantial growth of 16.8% in average same-Cage sales ⁽²⁾.

Sportscene's consolidated revenues increased by 12.5% to $95.1 million, whereas its consolidated adjusted EBITDA ⁽³⁾ jumped by 74.3% to $8.5 million, mainly as a result of the Cage network's good performance. Thus, Sportscene closed fiscal 2017 with a net income of $1.5 million or $0.36 per share (basic and diluted) compared to a net loss of $0.8 million or $0.15 per share in 2016. Cash flows from operations grew by nearly 50% to $6.7 million, which helped reduce the Company's total net debt despite investments of close to $7 million in new capital assets.

The fourth quarter ended August 27,2017, also gave rise to improved results, including a 13.3% increase in network total sales ⁽¹⁾, which reached $30.1 million and a 12.8% rise in consolidated revenues which amounted to $25.0 million. Consolidated adjusted EBITDA ⁽³⁾ practically tripled to reach $2.0 million. Sportscene closed the quarter with a slight net loss of $35,000 or $0.00 per share, compared to a net loss of $0.5 million or $0.11 per share in the same quarter of fiscal 2016.

"We are highly satisfied with the sales growth achieved last year, which according to us, points to a significant increase in the La Cage network's market share. As for our financial results, although they are showing a net improvement, we deem last year's results very satisfying, although they do not fully reflect our true potential as the physical modernization of the network is still under way", said President and C.E.O. Jean Bédard.

Main Achievements of Fiscal 2017

During the last fiscal year, in addition to building a new Cage, six more existing Cages were converted to the new design, which is now implemented in about half the network. In light of the considerable impact the Cage modernization continues to have on the sales and customer traffic of renovated units, the Company aims at completing the conversion of the network by the end of fiscal 2019, i.e., within two years.

Promoting the quality and stability of its workforce is another priority for Sportscene Group. At the beginning of fiscal 2017, the Company launched the first phase of the Académie Cage, which provided all restaurant managers with a leadership program and all chefs with customized training, certified by a diploma from Institut de tourisme et d'hôtellerie du Québec. Tailored activities were also developed to inform and motivate employees who work with customers on a daily basis.

Lastly, a number of technological projects were launched last year or will soon be launched to provide the Sportscene and the Cage network with efficient new tools, tailored to the Company's needs and encompassing all key strategic aspects of its business: operations planning and management, training, internal communication, marketing and customer relations.

"We are confident that Cage sales will continue to grow through the next fiscal year, along with the profitability of both the Cage network and the Company. We will maintain our focus on our main strategic targets, namely the physical transformation of the network, employee engagement and training, and ongoing innovation with respect to our food offering and technological advance", the C.E.O. concluded.

Profile

Sportscene Group is a pioneer and a leader in the ambience restaurant niche in Quebec, where it has operated a chain of sports-themed resto-bars since 1984: La Cage – Brasserie sportive ("La Cage"). Enjoying a strong brand image, La Cage comprises 44 units located across Quebec at the date hereof. The Cages offer complete foodservices and bar services in a sophisticated sports-inspired décor featuring the most advanced audio-visual technologies.

The following items are not performance measures consistent with IFRS:
(1)	Total network sales correspondent to sales achieved by all La Cage restaurants, including corporate units, partnerships and franchises.
(2)	Average same-Cage sales isolate the impact of restaurant openings and closures to assess the actual trend in restaurant sales.
(3)	In Sportscene's statement of comprehensive income, consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net (income) loss of joint ventures and associates and income taxes", from which other (gains) losses are excluded, and to which the Company's share of earnings before financial expenses, amortization and income taxes of joint ventures and associates is added.

For further information regarding the results and financial position of Sportscene Group Inc., refer to the management's report as well as the audited consolidated financial statements and accompanying notes for the fiscal year ended August 27, 2017, available on SEDAR.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Reconciliation of Non-IFRS Financial Measures
	Fourth Quarter		Fiscal Years Ended
	August 27, 2017	August 28, 2016	August 27, 2017	August 28, 2016
Restaurant revenues	20,692	17,614	78,590	65,426
Food Concession revenues	(1,902)	(1,794)	(3,665)	(3,353)
Non-banner revenues	(1,596)	(1,364)	(5,841)	(5,409)
Revenue from franchises and joint ventures	12,888	12,086	51,396	50,088
Total network sales	30,082	26,542	120,480	106,752
Income before financial expenses, amortization, net (income) loss of joint ventures and associates and income taxes	1,777	570	7,705	4,224
Other (gains) losses	(4)	(100)	(121)	(90)
Adjusted EBITDA	1,773	470	7,584	4,134
Earnings before financial expenses, amortization and income taxes of joint ventures and associates	247	181	885	751
Consolidated adjusted EBITDA	2,020	651	8,469	4,885

Consolidated statements of comprehensive income
for the years ended August 27, 2017 and August 28, 2016
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)
			August 27, 2017	August 28, 2016
			$	$
Revenues			95,085	84,551
Cost of sales			30,924	26,882
Selling and administrative expenses, excluding amortization			56,577	53,535
Other (gains) losses			(121)	(90)
Earnings before financial expenses, amortization, net (income) loss of joint ventures and associates and income tax			7,705	4,224
Amortization			4,842	4,387
Financial expenses			800	715
Net (income) loss of joint ventures and associates			(161)	78
			5,481	5,180
Income (loss) before income tax expenses			2,224	(956)
Income tax expense (recovery)			766	(205)
Net income (loss) and comprehensive income (loss)			1,458	(751)
Net income (loss) and comprehensive income (loss) attributable to:
	The Company's shareholders		1,519	(622)
	Non-controlling interests		(61)	(129)
Net income (loss) and comprehensive income (loss)			1,458	(751)
Earnings (loss) per share (in dollars):
		Basic	0.36	(0.15)
		Diluted	0.36	(0.15)
Weighted average number of outstanding Class A shares (in thousands):
		Basic	4,165	4,165
		Diluted	4,165	4,165

SOURCE Sportscene Group Inc.

Jean Bédard, Chairman of the Board, President and Chief Executive Officer; François-Xavier Pilon, Vice-President, Finance; 450-641-3011

Related Links

http://www.cage.ca